How Much Can You Sue an Employer for Misclassification?

An employer’s misclassification tactics can deny you fair wages, benefits, and legal protections. You may be entitled to compensation, including back pay, retirement contributions, and potential punitive damages, by pursuing legal action.

By Brad Nakase, Attorney

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Table of Contents

1. Can you sue for misclassification?

2. Employee Misclassification: A Comprehensive Overview

3. Can I file a misclassification lawsuit against my employer?

4. Elements Influencing Compensation for Employee Misclassification

5. Typical Cases of Misclassification

6. Various Forms of Compensation for Employee Misclassification

7. Restrictions on Claims of Misclassification

8. Restrictions imposed by federal law

9. Hiring a lawyer for employment disputes involving misclassification

10. When to Reach Out to a Lawyer About Misclassification

Can you sue for misclassification?

You should be compensated fairly for the time and energy you put into your job. But your employer might disagree. If your employer tries to misclassify you, they may avoid paying you the wages and benefits you deserve. This could be due to ignorance of the law or intentional planning on their part.

Employee misclassification can have major financial repercussions both now and in the future. This practice strips you of the money you’ve worked hard for, as well as the rights you have as an employee and the protections you should have in the workplace.

Because of the gravity of the problem, misclassification is punishable by heavy fines under federal and state law. Read on to find out how your boss can wrongfully classify you, how much money you could be due in damages if this happens to you, and how to sue your boss legally, including how much time you have to do it.

You may need to take legal action to assert your rights in a misclassification situation. Having an experienced employment law attorney on your side can simplify what can be a complicated legal process.

Employee Misclassification: A Comprehensive Overview

Employers commit misclassification when they fail to pay employees the correct wages or benefits based on their actual employment status. Some employers mistakenly classify employees because they don’t know the law, while others do it on purpose to save money and help their business financially.

Misclassification of workers by employers may put them in violation of various state and federal statutes. These statutes make it illegal to engage in this practice and give victims of workplace injuries financial compensation.

Can I file a misclassification lawsuit against my employer?

You might be asking, “Is it possible to sue my boss for misclassification?” It is possible to have a misclassification claim if your employer fails to pay you the wages and benefits that are appropriate for your job. If you believe you are a victim of misclassification and may have grounds to sue, the following may be proof:

You are being treated as an employee, but you aren’t receiving benefits.
Your boss is making you put in extra hours without compensating you fairly.
You receive a 1099 from your employer while they tightly regulate your hours and other aspects of your work schedule.

A misclassification lawsuit usually won’t address your overall dissatisfaction with your employer’s benefits or your perception that your salary does not reflect the value of your work.

Just because your contract seems to back up your employer’s actions doesn’t mean you shouldn’t consult an employment lawyer. Even if your employment contract specifies that you are an “independent contractor” or a “exempt” employee, that does not mean that the contract is conclusive of any matter; your misclassification lawsuit may still go forward.

Elements Influencing Compensation for Employee Misclassification

You can get your employer to pay you damages if you sue them for misclassification. Several factors will determine the total amount of money your employer might be required to pay in damages for employee misclassification.

The length of time you were wrongfully denied your due compensation will be a major consideration. The severity of damages and penalties is proportional to the length of time that the misclassification has persisted.

In determining the amount of damages that your employer may be required to pay, it is important to consider whether their actions were intentional or part of a pattern of conduct. Your employer may be liable for extra civil penalties as compensation if this factor is present.

Typical Cases of Misclassification

Various forms of misclassification exist. Your employer classifying you as a “independent contractor” rather than a “employee” is one of the most common cases of employee misclassification. This takes some of the burden off of your employer to pay your benefits and withhold taxes.

Another possibility is that an employer will mistake a non-exempt worker for an exempt one. The law protects non-exempt workers from wage and hour violations, but “exempt” employees are not. Employers frequently use this tactic to avoid paying their employees overtime and meal and rest breaks.

Employers classifying full-time workers as part-time or hourly wage workers as salaried employees is another typical case of misclassification. Most of the time, businesses do this so they can avoid providing their employees with benefits or overtime pay.

Various Forms of Compensation for Employee Misclassification

One way to get your losses compensated is to file a lawsuit and seek damages. For every day that a misclassification violation persists, your employer could face statutory penalties.

In a misclassification lawsuit, how much money can an employee seek? Here are some of the damages that could be recoverable:

1. Time and lost wages

A worker has the right to compensation equal to the value of meal and rest breaks that they were required to work through without compensation. You can also seek these lost wages in a lawsuit if you worked more than 40 hours but did not receive an overtime rate.

You might be able to get back twice as much money as you lost in wages. For instance, in certain cases, you may be able to recoup as much as $10,000 in lost wages if your employer failed to pay you $5,000 in overtime pay for an entire year.

2. Retirement contributions and benefits

There are a variety of benefits and retirement contributions that your employer might provide, or at least be required to provide. If that’s the case, but you still lost out on those benefits because of incorrect categorization, you can get your money back.

You may be able to collect the money you were due if, for instance, your employer matched up to 20% of your 401(k) contributions but you were wrongly classified as an independent contractor.

3. Psychological anguish and punitive damages

If your employer’s actions have caused you mental anguish, you may be able to recover damages for mental anguish. In extreme circumstances, you may be able to seek punitive damages from your employer as a form of punishment for their wrongdoing.

Not all cases involving misclassification allow for punitive and emotional distress damages. It is up to your California employee rights lawyer to tell you whether you have a case for punitive damages or compensatory damages.

You may be able to get your money back in liquidated damages if there are other errors in classification. Liquidated damages are a set amount that courts typically award as fair compensation.

Restrictions on Claims of Misclassification

You have the option to sue under various federal or state statutes when dealing with cases of misclassification. Which legal mechanism can be used to seek compensation depends on a number of things, one of which is the relevant statute of limitations. The statute of limitations specifies how long you have to bring a lawsuit following a misclassification incident.

Restrictions imposed by federal law

The Fair Labor Standards Act (FLSA) provides a two-year statute of limitations for misclassification lawsuits involving unpaid wages or overtime.

Hiring a lawyer for employment disputes involving misclassification

Consult an experienced California employment law attorney if you think you may have a case for employer misclassification. There are a number of ways in which you can benefit from and even influence the result of your claim with the help of an experienced attorney.

Claims of misclassification require extensive investigation, just like any other problem in the workplace. As part of this process, you must gather and examine documents relevant to your claim, as well as interview witnesses who are familiar with your circumstances.

To speed up the process of your claim, you should hire an attorney who is knowledgeable in these areas and has access to the resources necessary to complete them quickly. On top of representing you in court, your attorney can also act as your representative during any negotiations that may take place.

Instead of taking the risk of going to trial, your employer may try to resolve your dispute through mediation. An employment lawyer’s ability to negotiate on your behalf depends on his or her experience and training in this area.

Additionally, your lawyer ought to be prepared to litigate your case in the event that a settlement fails to adequately compensate you for your losses. The combination of a thorough investigation and litigation expertise developed in the courtroom enables your lawyer to effectively present your case to the court and defend your claim.

When to Reach Out to a Lawyer About Misclassification

After a misclassification situation, you might be due a lot of money in damages, like back pay, overtime, and savings for retirement. Whether your employer’s actions were deliberate, the amount of time you were wrongly classified, and the wages you were due all play a role in determining the maximum amount you can sue them for in a misclassification case.

However, you have a short window of opportunity to exercise your rights, and the procedure can be complicated. It is imperative that you consult with a seasoned employment attorney in California without delay in light of this information. Seek legal counsel as soon as possible, while witnesses’ recollections are still vivid and relevant documents are easy to find.

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How Much Can You Sue an Employer for Misclassification?

Can you sue for misclassification?

Employee Misclassification: A Comprehensive Overview

Can I file a misclassification lawsuit against my employer?

Elements Influencing Compensation for Employee Misclassification

Typical Cases of Misclassification

Various Forms of Compensation for Employee Misclassification

Restrictions on Claims of Misclassification

Restrictions imposed by federal law

Hiring a lawyer for employment disputes involving misclassification

When to Reach Out to a Lawyer About Misclassification

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